Vecna Robotics raises new capital as the warehouse automation industry grows – VentureBeat

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As pandemic headwinds continue to put a strain on the global supply chain, companies are increasingly investing in warehouse automation technologies. It is estimated that more than 80% of warehouses today have no automation whatsoever. However, the market for warehouse automation solutions is expected to climb from $15 billion in 2019 to $37.6 billion by 2030, according to Research and Markets. In a recent survey of warehouse executives published in Forbes, a full 96% indicated that they expect the warehouse automation value proposition to increase over the next three years. Moreover, a separate report found that 27% of decision-makers in manufacturing, transportation and logistics, and other industries plan to leverage warehouse automation in some form by 2024.

Investors, eager to get in on the ground floor, have poured significant amounts of capital into startups developing warehouse automation products. According to PitchBook, warehouse robotics startups alone raised a combined $381 million in the first quarter of 2020 up 57% from the same period in 2019. Locus Robotics, Exotec, InVia Robotics, Fabric, Geek+, and Attabotics are among those whove received windfalls. So is Vecna Robotics, which automates manufacturing and warehouse operations for customers including FedEx, Medline, and Milton CAT.

Vecna today announced that it raised $65 million in a series C round led by Tiger Global with participation from Lineage Logistics, Proficio Capital Partners, and IMPULSE, bringing the companys total capital raised to $128.5 million. Vecna says that the funds will be used to fulfill new orders while expanding the companys existing operations.

Waltham, Massachusetts-based Vecna specializes in warehouse workflow orchestration and driverless pallet lifter technologies. Founded by Daniel Theobald in 2018, Vecnas platform automatically manages fleets of autonomous pallet trucks and tow tractors while allowing warehouse workers and managers to customize the robots behaviors.

Vecna a spin-off from Vecna Technologies, which was cofounded in College Park, Maryland over two decades ago by Theobald, an MIT engineering alumni initially received funding from the U.S. Army,DARPA, and other government agencies to develop a humanoid robot (the Battlefield Extraction-Assist Robot, or BEAR) capable of rescuing wounded soldiers from the battlefield. However, ahead of its incorporation in 2018 as a wholly owned Vecna subsidiary, Vecna pivoted its focus, repurposing the autonomy software from the BEARs hardware and using it to develop logistics and delivery robots.

In its simplest form, materials handling comes down to moving materials, like ecommerce goods, products or shipped items, within a building or between a building and a vehicle. Traditionally, materials handling relied on humans to move goods throughout a warehouse or distribution center. However, this strategy leads to critical inefficiencies today, Craig Malloy, CEO of Venca, told VentureBeat via email. To combat these challenges, organizations invested in semi-automated solutions. However, this type of technology requires fixed infrastructure, purpose-built to a specific building and its needs. While these solutions provide automation, they lack the flexibility to adapt to fluctuating demands and changes in building use and business models. This is why the hype and interest in robotics is growing.

Vecna claims it can automate the process of unloading materials from an incoming truck into outbound trailers, vans, or rail cars. Its robots are designed to gather full cartons or boxes of products and group and package related items together as one unit, delivering materials to assembly lines and moving products to fulfillment operators who pick whats needed.

Instead of automating an individual piece of hardware, [Vecna] delivers the functionality to drive automation across any piece of equipment. The AI-powered solution also provides warehouses with system-wide orchestration, unifying and seamlessly allocating tasks between humans, robots and equipment to increase efficiency and productivity, Malloy explained. This technology acts as the brains of the warehouse, coordinating humans, robots and manual equipment to ensure each task is getting completed in the most optimal way ensuring the right resource is delivering the right goods to the right place at the right time in the most optimal fashion.

All of Vecnas robots are managed through the companys Pivotal software, which handles firmware updates and analytics. With Pivotal, warehouse workers can view pick lists containing product images and other information and corral the robots based on their location, availability, and more.

Vecnas automation technology is primarily designed to boost overall efficiency, safety, and productivity to enable more stable and transparent supply chains, Malloy said. For example, one human worker can oversee the work of several self-driving forklifts at one time, while also gaining insight into every order being processed by the system and where every vehicle is in real-time by using Pivotal, allowing for more efficient material flow and traffic management Additionally, data from deployed robots collected through embedded industrial internet of things and cloud technologies can be used to both provide real-time monitoring and analytics of the operation through Pivotal, as well as fuel AI models and improve the performance and intelligence of these connected systems over time.

In the past year, Vecna has introduced self-driving forklifts equipped with path planning and obstacle avoidance two capabilities that the company claims is an industry first for autonomous forklifts. Vecna more recently partnered with Alta Material Handling, a construction and material handling equipment dealer based in Michigan, Ohio, to spec, sell, and service Vecnas vehicles to new and its 30 existing customers.

Tech and logistics giants appear confident in the future of warehouse automation. Amazon has about 350,000 mobile drive unit robotscurrently working alongside the hundreds of thousands of humans employed at its fulfillment centers. DHL, for its part, last year announced that it would spend $360 million to expand and automate its distribution center network.

The pandemic has greatly accelerated the need for Vecnas solutions, as global supply chain challenges have heightened on top of increased consumer demand, Malloy continued. As demonstrated by growing ecommerce expectations, which have heightened due to the continued COVID-19 crisis, a failure to evolve with changing demand significantly hinders productivity, on-time deliveries, and customer satisfaction. But this time, its a change that cant be solved by adding more static robots. Instead, these challenges require smart, flexible solutions.

But despite the challenges that warehouses face today, which range from insufficient space to labor shortages, many face barriers to adopting automation. No technology is perfect, and errors can propagate more quickly with the faster pace of automation.

Retailer Asos suffered a loss of about $25 million in 2019 due to a failure by a new Automated Storage and Retrieval System (ASRS) to properly put away inventory, leaving products backlogged in receiving areas. Mechanical issues can crop up, too, putting a system out o f commission until replacement parts can be tracked down.

Its been well-documented that Amazons use of robots in its warehouses has led to more injuries for human workers. Retailer Asoslost $25 millionin 2019 when its new automated storage and retrieval system failed to properly put away inventory, leaving products backlogged in receiving areas. Also in 2019, Rent the Runway experienced a software glitch that failed to account for outgoing orders, meaning that customers could make orders that the company couldnt fulfill.

Companies like 140-employee Vecna counter that robots, on the whole, make fewer mistakes than humans and can measurably boost productivity. According to a paper from Londons Center for Economic Research, robotics and automation technologies have increased labor productivity by about 0.35% annually between 1993 and 2007, which might not sound like much but represents 10% of total GDP growth in the countries canvassed in the study.

Vecnas [automation solution] improves society by empowering human workers to pursue more fulfilling and less dangerous, repetitive work, Malloy said. The solution does this by deploying human associates to tasks that require creativity and problem-solving and their robot counterparts to tasks that are repetitive in nature. By fulfilling the mundane, dirty and dangerous jobs humans were once tasked with this technology is enabling workers to find more fulfillment by upskilling and pursuing new opportunities, sometimes even alongside these innovative solutions by working with their new robotic coworkers or managing them as robot experts. As a result, Vecnas customers have realized a decrease in employee turnover and an increase in employee satisfaction, helping to combat the labor shortage.

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Vecna Robotics raises new capital as the warehouse automation industry grows - VentureBeat